2012: Year of Railroad Commission Accomplishments

AUSTIN--The Railroad Commission of Texas, the state’s oldest regulatory agency, has achieved numerous advances throughout the past year. Commission milestones have included adopting new oil and gas penalty guidelines; conducting more than 100,000 safety inspections; and reducing pipeline damage incidents. In addition to regulating the oil and gas industry, the Commission promotes research and education on the use of alternative fuels and has jurisdiction over gas utility, surface mining and pipeline industries.

The Commission’s primary focus is on stewardship of natural resources and the environment; personal and community safety; and support of enhanced development and economic vitality in Texas.

The Commission’s 2012 accomplishments include:

• In FY 2012, the Commission investigated, assessed or cleaned up 253 abandoned oilfield sites and plugged 764 orphaned wells using fees paid by the industry into the Oil & Gas Regulation & Cleanup Fund.

• The Commission continued to strengthen environmental protection and public safety efforts, with Oil and Gas Division field staff in the Commission’s District Offices monitoring more than 398,000 wells across the state and conducting approximately 118,000 field inspections.

• The Commission strengthened its oil and gas enforcement actions by adopting penalty guidelines based on risks posed and a violation’s severity. Additionally, the Commission assigned higher penalties for repeat violators.

• In Conference meetings held over the course of the year, the Commission reviewed and signed orders disposing of more than 4, 400 applications, complaints, and enforcement cases including: 3,827 Agreed Enforcement dockets; 329 Uncontested Oil and Gas dockets; 100 Default Enforcement cases; 71 Contested Oil and Gas Dockets; 41 P-5 Organization Report Form denials; 33 Gas Service Dockets; and 28 Surface Mining Dockets. The Commission now publishes complaint and enforcement data on the agency website where it can be easily accessed by the public.

• In February 2012, the Commission implemented one of the nation’s most comprehensive chemical disclosure rules for hydraulic fracturing. This Commission rule requires oil and gas operators to disclose water volumes and chemicals used when hydraulically fracturing wells. Texas is one of the first states to require making this information accessible to the public.

• Commission staff provided technical information on how the agency regulates oil and gas exploration and production in more than 30 meetings and speaker presentations. Dignitaries from Brazil, Turkmenistan, South Africa, Norway, China, Iraq, Republic of Indonesia, Italy, Canada, and Mexico traveled to Texas to meet with Commission subject-matter experts. These international dignitaries gained insight into how the Railroad Commission has become a world-renowned regulator, effectively overseeing energy production for economic development while protecting the environment.

• The Commission has begun revising and field testing changes to its enforcement policies, including ranking violations from “minor” to “major” and automatically referring severed leases to enforcement.

• The Commission’s Pipeline Safety Division’s inspectors completed 3,200 inspections in 2012. Since 2010, RRC pipeline inspectors have increased inspections on distribution systems by 7 percent; by 68 percent on gas transmission lines; and by 37 percent on hazardous liquids lines.

• The Commission’s Texas Pipeline Damage Prevention program continued a positive trend that began with its inception in FY 2008 of reducing digging-related accidents, the number one cause of pipeline accidents in Texas. Excavation-related pipeline damage incidents dropped by 32 percent between FY 2008 and FY 2012.

• The Commission's Information Technology Services Division added additional queries and features to the Online Research Queries. The queries now provide the public with the opportunity to not only view the data but to download the data either as a text file or directly into a spreadsheet. The ability to drill down and view all aspects of a lease and the associated operator has also been added. The Commission’s online public queries receive more than a million page views per month.

• The Commission also initiated IT modernization efforts to be implemented in the coming months. Highlights include taking full advantage of the Microsoft “Cloud” service, Office 365; new GIS functionality and improvements to include functionality similar to Google Maps; an integrated compliance, enforcement and docket system as recommended by the Sunset Commission (pending Legislative approval); and online filing and payment expansions to improve efficiency and ease of use.

• The Commission presented the 2012 Texas Reclamation Award to Texas Westmoreland Coal Company for their work in developing innovative and effective stream re-establishment techniques to return a stream to its pre-mine form and function. The Commission’s Surface Mining and Reclamation Division reviewed the nominations and selected Texas Westmoreland for their Jewett Mine Stream Restoration Initiative, which features various methods and techniques to restore streams that are impacted by mining activities.

• Surface Mining and Reclamation Division inspectors conducted 616 inspections on 28 permitted lignite mines in FY 2012. This was an almost 7 percent increase in inspections from the previous year.

• In FY 2012, the Commission’s Alternative Fuels Research & Education program (AFRED) issued $282,650 in rebates to 1,785 Texas propane consumers who equipped their homes and businesses with energy-saving propane water heaters and other propane appliances. AFRED also used grants from the U.S. Department of Energy and the State Energy Conservation Office to make awards totaling more than $8.6 million to 34 Texas school districts, cities and other public entities to help them buy 495 alternative-fueled vehicles (including 408 propane school buses) and to help build or upgrade 23 propane fueling stations.

• AFRED’s training program achieved national recognition in 2012 by publishing five technical manuals under a grant from the national Propane Education and Research Council. AFRED also trained more than 3,400 propane technicians and managers—about one-third of the industry in Texas—at 295 eight-hour propane safety and regulatory compliance classes statewide. This Division also administered a record 4,458 Liquefied Petroleum Gas (LPG), Compressed Natural Gas (CNG) and Liquefied Natural Gas (LNG) qualifying examinations, 16 percent more than in 2011, the previous record year, and 32 percent more than in 2010.

• The Commission’s Gas Services Division regulates 31 natural gas distribution utilities and 177 transmission and gathering utilities. The Division conducted 134 utility field audits resulting in the collection of $550,282 in underpaid gas utility taxes and cited gas utility companies for rate overcharges requiring customer refunds of $826,458. The Division also processed 174,000 natural gas utility tariff filings and handled more than 690 natural gas consumer inquiries and complaints.

• Additionally, the Commission reviewed 95 natural gas utility dockets, including both statements of intent to increase rates and interim rate adjustments. The Commission reduced every proposed statement of intent to increase rates, ultimately resulting in an affordable, reliable and safe natural gas supply for Texas consumers. The Commission works to ensure Texans benefit from the state’s abundant natural gas supply and that natural gas utilities transport and deliver natural gas to consumers in a fair, efficient and safe manner.

• The Commission's LP-Gas Operations program in the Alternative Energy Division (AED) conducted more than 15,000 Liquefied Petroleum Gas (LPG), Compressed Natural Gas (CNG) and Liquefied Natural Gas (LNG) safety inspections of schools, health care facilities, public installations, commercial and industrial sites, school buses, mass transit and cargo tank motor vehicles, in addition to investigating accidents and safety related complaints. LP-Gas Operations also processed more than 4,200 stationary installation completion reports and approvals, issued 4,992 licenses and registered 4,155 transports and special delivery vehicles in FY 2012.

• The Commission continued its commitment to safety education and training by sending the LP-Gas Operations’ safety training team to the annual Municipal Fire School at Texas A&M University, where they provided firefighters and first responders with LP-Gas safety information for use when responding to LP-Gas emergencies.

• The Commission adopted rules and procedures to implement new statutory requirements regarding inactive wells. Depending on how long the well has been inactive, operators are required to perform surface cleanup activities and submit filings to the Commission in order to renew their Organization Report. Any entity performing operations within the jurisdiction of the Commission’s Oil & Gas Division is required to have an active Organization Report on file.

• Last year, the Oil and Gas Division’s Information Services provided more than 810,000 documents to customers upon their request. As part of the Commission’s initiative to image historical oil and gas hearing files from 1930-2011, all files for RRC District 1 were imaged and made available online. An additional initiative was launched to also image historical injection well permit files, and RRC District 1 was completed for these injection well files. These paper files are accessed by citizens daily and occupy more than one mile of space in the Commission’s office in downtown Austin. Providing the images online will make the documents more accessible and ensure they are preserved in case of a disaster.

• The Commission hosted educational workshops, classes and seminars across Texas, including more than 35 pipeline and LP-gas education programs; a day-long Oil and Gas Seminar in San Marcos; and a two-day Oil and Gas Expo in Austin.

As the New Year and 83rd Legislative Session begin, the Commission sees many opportunities for further accomplishments. Sunset Advisory Commission recommendations, including a possible name change and a move towards greater self-funding, are expected to be considered by Texas legislators. Rules related to semi-mobile commercial recycling facilities will be implemented in 2013. Additionally, the Commission has initiated rulemakings that address well drilling, casing and cementing requirements. The Commission will continue its efforts in 2013 to provide consistent and clear regulatory requirements while enhancing environmental stewardship over Texas’ natural resources.

About the Railroad Commission

Established in 1891, the Railroad Commission of Texas is the oldest regulatory agency in the state. The Commission has a long and proud history of service to both Texas and to the nation, including more than 90 years regulating the oil and gas industry. Additionally, the Commission promotes research and education on the use of alternative fuels and has jurisdiction over gas utility, surface mining and pipeline industries. Our mission is to serve Texas by our stewardship of natural resources and the environment, our concern for personal and community safety, and our support of enhanced development and economic vitality for the benefit of Texans. To learn more, please visit http://www.rrc.state.tx.us/.